Medicare physician fee schedule
Charles Fiegl
December 2024—Payment policies that the CAP championed to protect the value of pathology services have been captured in the 2025 Medicare physician fee schedule published on Nov. 1.
The Centers for Medicare and Medicaid Services included in the 2025 fee schedule updated relative value units for three apheresis services and increased nonphysician cost components for key pathology and laboratory labor types. In a separate hospital payment regulation for 2025, the CMS also declined to move forward with surgical pathology tissue exam payment decreases to which the CAP objected.
Overall, the 2025 Medicare physician fee schedule includes payment rate reductions for most physician specialties and providers totaling 2.83 percent. The decrease stems from the expiration of temporary pay increases Congress enacted. However, the reduction is mitigated for pathology because of increases elsewhere in the 2025 fee schedule. Overall, pathology payments will fall by 2.54 percent unless Congress passes legislation to stop or lessen the pay cuts before Dec. 31. The CAP, with the American Medical Association and other physician groups, has lobbied Congress throughout 2024 to enact short- and long-term reforms to Medicare’s payment system and will continue to pressure lawmakers to act before the year ends.
In addition to increasing payment for 2025, the CAP has called on Congress to adjust Medicare payment annually with increases pegged to an inflationary index. With inflation, pathologists would see a net six percent reduction in revenues as Medicare reimbursement falls by 2.54 percent and expenses are expected to rise by 3.5 percent.
Appropriate valuation of apheresis clinical labor. The CMS finalized an update to the nonphysician clinical staff labor type used in its cost methodologies to help determine Medicare payments for therapeutic apheresis for plasma pheresis (CPT code 36514); therapeutic apheresis with extracorporeal immunoadsorption, selective adsorption, or selective filtration and plasma reinfusion (CPT code 36516); and photopheresis extracorporeal (CPT code 36522). The update changes the labor type from registered nurse/licensed practical nurse (RN/LPN) to registered nurse/oncology nurse (RN/ON). This update stems from the CMS’ concern that these services were potentially misvalued and would benefit from additional review. To address the CMS’ concerns, the CAP led a multispecialty stakeholder group that focused on updating the current nonphysician clinical staff labor type from an RN/LPN blend to an RN/ON.
The CAP argued that an oncology nurse more appropriately reflects the specialized training, work, and skill of an apheresis nurse. This finalized change increased the reimbursement rate for these services in non-facility settings.
Clinical labor rate update. In general, services paid through the Medicare physician fee schedule have two components: a physician work component and a technical component. The technical component represents the clinical (nonphysician) labor, medical supplies, and equipment used to furnish a particular service. Clinical labor is represented as a per-minute expense, with the CMS determining the rate paid for each clinical labor type.
The CAP in 2023 and 2024 used public wage survey data to advocate for increases to both of the CMS’ histotechnologist and cytotechnologist clinical labor rates used in CMS’ cost methodologies to help determine Medicare payments. The CMS agreed with the CAP and proposed phasing in the increase for each clinical labor type. Next year, 2025, marks the final year of this phase-in, and the CMS has finalized an increase to the histotechnologist per-minute clinical labor rate from $0.57 to $0.64 and the cytotechnologist per-minute clinical labor rate from $0.75 to $0.85. Many pathology services should experience an increase or an offset to the decrease in the conversion factor to their technical component and global payments in 2025 because of this increase. The CAP’s advocacy to improve the clinical labor rates resulted in an increase of more than $34 million during the phase-in period for these new rates.
CAR T-cell therapy services. The CMS decided to continue bundled payments for three of four chimeric antigen receptor T-cell services to describe the procedures required for creating, preparing, and administering CAR T-cell therapy. The CMS had considered a proposal supported by the CAP to separately pay for each service under the physician fee schedule for these services. The CAP led a multispecialty effort to develop and present relative value unit recommendations at the September 2023 AMA Relative Value Scale Update Committee (RUC) meeting. As was outlined in the proposed 2025 Medicare physician fee schedule published in July 2024, the CMS had proposed the RUC-recommended work relative value units for all four CAR T-cell services. The CAP later encouraged the CMS to finalize the proposal.
Unfortunately, in the final 2025 fee schedule, the CMS said it believed that a bundled status is appropriate for these codes to remain in alignment with the Hospital Outpatient Prospective Payment System, thus avoiding the need to pay separately for each step used to manufacture a drug or biological.
The CAR T-cell therapy administration CPT code 38228 is a replacement code for category III CPT code 0540T, which does not have bundled status with another service. The CMS finalized active separate pricing for CPT code 38228 at the proposed work relative value unit of 3.00.
Expansion of colorectal cancer coverage. Beginning Jan. 1, 2025, the CMS will expand its coverage of screening services for colorectal cancer to include computed tomography colonography. In addition, the CMS finalized its proposal to remove coverage of double-contrast barium enema. The CMS also eliminated cost-sharing for complete colorectal cancer screening tests that include a follow-on screening colonoscopy after a Medicare-covered noninvasive stool-based colorectal screening test or a Medicare-covered blood-based biomarker screening.
The CAP supported these proposals to expand coverage for and access to colorectal cancer screening. In formal comments the CAP submitted to the agency on Sept. 9, it said the expansion would directly advance health equity by promoting access and removing barriers for much needed cancer prevention and early detection within rural communities and communities of color that are especially impacted by colorectal cancer.
Fine-needle aspiration. In the 2025 Medicare physician fee schedule proposed rulemaking, a separate entity had nominated fine-needle aspiration services (CPT codes 10004, 10005, 10006, 10021) as potentially misvalued and further suggested the codes be reviewed again. The CAP said in its letter to the CMS that these codes were not potentially misvalued and therefore should not be evaluated a second time. In the final rule, the CMS agreed with the CAP and indicated the codes were not potentially misvalued.
Hospital-ambulatory cut to pathology averted. For the 2025 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center payment system regulation also released on Nov. 1, the CMS had proposed moving surgical pathology tissue exam by a pathologist (CPT code 88309) to the lower ambulatory payment classification (APC) 5673 “Level 3 Pathology” from APC 5674 “Level 4 Pathology.” Had the proposal been finalized, it would have resulted in a 57 percent decrease in the payment amount and would not have aligned with the complex set of resources required to examine these specimens.
The CAP had argued in formal comments submitted to the CMS that the service includes level four surgical pathology evaluation representing the most complex surgical pathology tissue examinations by pathologists and requiring arduous specimen preparation. In addition, the proposed reassignment would create a resource cost-rank order anomaly with other physician services and the technical costs would not be fully recovered from each unit of service. The CAP said the unique complexity of specimens associated with these services warranted a level four pathology ambulatory payment classification.
The CMS maintained and finalized the APC assignment of APC 5674 for surgical pathology tissue exam by a pathologist (CPT code 88309).
Charles Fiegl is acting senior director, CAP advocacy communications, Washington, DC.